The Spring Budget included a number of exciting changes.
Summary of main changes
Full Expensing (from 1st April 2023 until 31st March 2026)
- Available on Main Pool expenditure
- Deduct 100% of qualifying expenditure during year of expenditure
- No Cap
- For Companies only (not LLP's or Individuals)
- Only available on new and unused plant and machinery
- Excludes Cars, Gifts and assets bought to lease out
- Special disposal rules apply - immediate balancing charge equal to 100% of disposal value
- Important to track assets for disposal purposes
- Effective construction contract date to be confirmed (e.g. 15th March 2023)
- Could be a permanent incentive
50% First Year Allowance (from 1st April 2023 until 31st March 2026)
- Available on Special Rate Pool expenditure
- Deduct 50% of Special Rate expenditure during year of expenditure
- No Cap
- Balance of expenditure will attract a 6% annual writing down allowance in subsequent years
- For Companies only (not LLP's or individuals)
- Only available on new and unused plant and machinery
- Excludes Cars, Gifts and assets bought to lease out
- Special disposal rules apply - immediate balancing charge equal to 50% of disposal value
- important to track assets for disposal purposes
- Effective construction contract date to be confirmed (e.g. 15th March 2023)
- Could be a permanent incentive
Annual Investment Allowance (AIA) (Permanent)
- £1m level to be permanent
- Claimed in same accounting period in which qualifying expenditure is incurred
- Available on second hand assets and assets bought to lease out
- Tracking of assets not required - so may be a simpler system to use for most companies
New Investment Zones (for Five Years - commencement date TBC)
- 100% Enhanced Capital Allowances on main pool and special rate pool expenditure
- 10% Enhanced Structures and Buildings Allowances (rather than 3%)
- 12 Zones proposed including the following 8 in England with the remaining 4 being located in Scotland, Wales and Northern Ireland;
- East Midlands
- Greater Manchester
- Liverpool City Region
- North East
- South Yorkshire
- Tees Valley
- West Midlands
- West Yorkshire